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Connecticut lottery, tribes poised for three-way sports betting competition

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When legal sports betting debuts next month in Connecticut, it’ll be remarkable for who’s involved.

The Mashantucket Pequot and Mohegan tribes, the casino “duopoly,” won’t have it all to themselves.

The Connecticut Lottery Corp., the quasi-public agency whose contributions to state coffers have exceeded the casinos’ payments of slot-machine revenue in every fiscal year since 2012-13, will be a major player, authorized to operate up to 15 retail sports betting locations around the state as well as an online “skin,” or brand. Earlier this month, lottery officials announced partnerships with vendor Rush Street Interactive and with Sportech, the state’s off-track betting operator.

The lottery will provide sports betting at 10 of Sportech’s 11 existing brick-and-mortar locations, including Bobby V’s restaurants at Bradley International Airport in Windsor Locks and in Stamford, at Sports Haven in New Haven and seven other Sportech “Winners” locations around much of the state, including one at Shea’s, a Manchester sports bar.

Two of the lottery's 15 sports betting locations must be located in Bridgeport and Hartford. None of them can be within 25 miles of the Mashantucket or Mohegan reservations.

For the state and lottery, the no-compete zones were a small price to pay for the tribes agreeing to abandon their demand for the exclusive right to offer sports betting in Connecticut, a major concession that paved the way for negotiation of a landmark gaming-expansion deal among Gov. Ned Lamont, the Mashantuckets and Mohegans.

"Yes, that was major," said Rodney Butler, the Mashantucket chairman, who acknowledged in an interview Friday that the lottery and Rush Street Interactive promise to be formidable competitors.

While Foxwoods Resort Casino and Mohegan Sun may be in a position to dominate online sports betting due to the databases they and their respective sports-betting partners — DraftKings and FanDuel — maintain, the lottery’s network of outlets and retail sports-betting locations will be an advantage in competition for the retail market, Butler said.

“They have the ability to make a lot of impressions,” he said. “Their retail locations will put them closer to the population in some places. If you consider the more than 2,000 places where they sell lottery tickets, you just can’t discount that they’re everywhere. And they don’t have to maintain the infrastructure we do. They can plow more money into marketing.”

Rob Simmelkjaer, chairman of the lottery’s board of directors, agreed retail sports betting will be the lottery’s strength. He said the Sportech locations and others the lottery has yet to select will put the lottery's retail sports betting operation within a 30-minute drive of 80% to 90% of the state’s residents.

“Online, obviously, we’re going against two very well-established brands,” he said, referring to the casinos. “We expect they’ll get off to a good start because of their databases. They’ll do well the first couple of years.”

Over time, competition for the online sports-betting market, which generally accounts for 70% to 80% of all sports betting revenue, could intensify, Simmelkjaer said.

“We expect in a market where there are only three operators (the lottery, Foxwoods and Mohegan Sun), that people who are really into sports betting are going to try all three,” he said. “Each will get a chance to acquire a majority of the market. It’ll come down to execution.”

Bettors can decide which operator to bet with based on variations in the products and services they offer, such as different odds, point spreads, returns and account-funding options.

Simmelkjaer said the lottery’s Sportech locations will have a combination of multiple kiosks and at least one betting window with a teller. The number of tellers will be increased for certain events, such as big NFL weekends. In locations like the Bobby V’s restaurants, the betting will be in cordoned-off areas. Some of the locations will serve food and beverages while others will not, as is now the case. He said the lottery is focused on establishing a Hartford location in the XL Center, formerly known as the Hartford Civic Center, and is considering several locations in Bridgeport, though not Sportech’s Shoreline Star, a former greyhound track.

The lottery will seek proposals from other business people in the state for the three remaining retail sports-betting locations it has been authorized to operate. Simmelkjaer revealed Friday that the lottery will give preference to bidders from underrepresented groups, including minority-owned and women-owned businesses.

“We will look at any response that comes in from outside the 25-mile radius (of each tribal reservation),” he said. “If it’s 26 miles, we’ll look at it.” 

Both the lottery and the casinos are planning to launch their retail and online sports-betting operations at the same time, as soon as the U.S. Department of the Interior signs off on amendments to the tribal-state gaming agreements and the legislature’s Regulation Review Committee approves new sports-betting regulations written by the state Department of Consumer Protection.

As of this past Friday, Butler, the Mashantucket chairman, was holding out hope that the approvals and the state’s licensing of operators would be secured in time for sports betting in Connecticut to debut Sept. 9, the day Tom Brady’s Super Bowl champion Tampa Bay Buccaneers meet the Dallas Cowboys in the NFL season opener.

“On paper, it can still happen,” Butler said.

But not if the Interior Department’s Bureau of Indian Affairs, instead of taking action in the next week or so, grants approval by letting a 45-day review period expire, as it has done in some other cases. That period, which began July 27, ends Sept. 9.

The Regulation Review Committee is scheduled to vote on the regulations Aug. 31.

Simmelkjaer said he expects sports betting to launch by the halfway point of the NFL season at the end of October.

b.hallenbeck@theday.com

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